By Abigail Philip David
Bitcoin and other cryptocurrencies have seen a sharp decline in recent days, rattled by US tariff threats from President Donald Trump and fresh controversies in the sector.
On Friday, Bitcoin dropped below $80,000 for the first time since November, hitting a low of $78,225.84—more than 25% off its peak last month. The slump comes after Trump, a vocal supporter of cryptocurrency, took office.
At the beginning of the week, Bitcoin was trading around $95,000 before a wave of investors pulled out, seeking safer assets amid market uncertainty.
Crypto Confidence Shaken by Scandals
“Market sentiment in the crypto space is at rock bottom,” said Simon Peters, an analyst at eToro.
A major security breach at Dubai-based exchange Bybit last week further eroded investor confidence. The platform reported a $1.5 billion Ethereum theft—the largest crypto heist in history, with the FBI pointing to North Korea as the likely culprit.
Naeem Aslam, an analyst at Zaye Capital, attributed the sector’s decline to “multiple scandals rocking the industry.”
Adding to the turmoil, Argentine President Javier Milei came under scrutiny for allegedly endorsing a failed cryptocurrency, $LIBRA, which collapsed, costing investors billions. Argentina’s federal prosecutors are now investigating whether Milei’s promotion of the token on social media involved fraud or breach of duty.
From Critic to Crypto Advocate
Cryptocurrencies, built on blockchain technology, were designed to provide a decentralized alternative to traditional financial institutions. However, the industry remains a prime target for cybercriminals, with an estimated $2.2 billion stolen last year, according to Chainalysis.
Trump, who once dismissed cryptocurrencies as a “scam,” has since become one of their most prominent supporters. Following his election victory, Bitcoin surged past $100,000 in December, prompting Trump to post on Truth Social:
“CONGRATULATIONS BITCOINERS!!! $100,000!!! YOU’RE WELCOME!!! Together, we will Make America Great Again!”
He has since pledged to make the US the “crypto capital of the world” and launched his own meme coin, $TRUMP. His wife, Melania Trump, also introduced a cryptocurrency, $MELANIA, to mark his inauguration. However, both coins saw their values crash soon after launch.
“Trump’s meme coin ventures may have done more harm than good,” noted Neil Roarty, a cryptocurrency analyst at ClickOut Media.
Regulatory Shift and Industry Shake-ups
Despite the current downturn, the crypto sector saw a rare win last week when Coinbase announced that the US Securities and Exchange Commission (SEC) had dropped its 2023 lawsuit against the company.
Trump had already begun loosening regulatory oversight by appointing Paul Atkins, a Washington attorney with ties to the crypto industry, as SEC chair, replacing the stricter Gary Gensler.
However, the industry is still reeling from major scandals, including the downfall of crypto exchange FTX in late 2023. Its founder, Sam Bankman-Fried, was found guilty of multiple charges, including fraud and money laundering, underscoring the sector’s ongoing volatility.
